Dismissal Of AmEx|Class Action Confirmed

MINNEAPOLIS (CN) – A federal judge confirmed the dismissal of a class action complaint against American Express’ February 2005 spin-off of its subsidiary, American Express Financial Advisors, and American Express Financial Advisors’ adoption of the Ameriprise brand.

Former AmEx Financial Advisors customers, angered by the sudden switch to being customers of the lesser-known Ameriprise Financial Services, contended that “any brand substitution required that the new brand be well-recognized.” Magistrate Judge Jeanne J. Graham suggested consenting to the defendants’ demand to dismiss, despite agreeing that American Express Financial Advisors breached its obligation to its customers by not providing a more popular brand name. Judge Graham rejected the plaintiffs’ various complaints and stated that the franchise agreement between The American Express Company and American Express Financial Advisors did not technically force American Express Financial Advisors to supply a well-recognized brand, customer obligations aside. Plaintiffs claimed that American Express violated faith. They said that the point of a franchise agreement is to uphold the well-known brand name attached with the mother business. Plaintiffs maintained that Judge Graham missed this in dismissing the complaint, but Graham held to the “unambiguous words” of the franchise contract not adhering American Express Financial Advisors to the “American Express” brand name. Because the plaintiffs argued that the decision to switch brands was not made by American Express Financial Advisors, but was made for the subsidiary as part of The American Express Company’s detachment, the court ruled that American Express Financial Advisors cannot be accused of selecting the Ameriprise brand in bad faith. This detail overrode the plaintiffs’ final objections and led to the court’s dismissal of the complaint.